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South Africa Political Snapshot New ANC President Ramaphosa’S Mixed Hand Holds Promise for South Africa’S Future

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South Africa Political Snapshot New ANC President Ramaphosa’S Mixed Hand Holds Promise for South Africa’S Future South Africa Political Snapshot New ANC President Ramaphosa’s mixed hand holds promise for South Africa’s future South Africa’s ruling party, the African National Congress, yesterday (20 December) concluded its 54th National Conference at which it elected a new leadership. South African Deputy President Cyril Ramaphosa was announced the ANC’s new leader against a backdrop of fast-deteriorating investor confidence in the country. The new team will likely direct the ANC’s leadership of the country for the next five years and beyond. Mr Ramaphosa’s victory is not complete. The election results have been the closest they have been of any ANC leadership election in recent times. The results for the top six leaders of the ANC (Deputy President, National Chairperson, Secretary-General, Treasurer-General and Deputy Secretary-General) and the 80-member National Executive Committee (NEC - the highest decision-making body of the party between conferences) also represent a near 50-50 composition of the two main factions of the ANC. Jacob Zuma, Mr Ramaphosa’s predecessor, still retains the presidency of South Africa’s government (the next general election is still 18 months away). It enables Mr Zuma to state positions difficult for the new ANC leadership to find clawback on, and to leverage whatever is left of his expanded patronage network where it remains in place. A pointed reminder of this was delivered on the morning the ANC National Conference commenced, when President Zuma committed the government to provide free tertiary education for students from homes with combined incomes of below R600 000 – an commitment termed unaffordable by an expansive judicial investigation, designed to delay his removal from office and to paint him as a victim in the event it may be attempted. All of this does indicate some risk that Mr Ramaphosa will face some resistance in effecting a step-change in the ANC’s direction of the government and the economy with the necessary expediency. However, South Africa’s party-list electoral system The mixed ANC leadership has over time proven itself to provide significant incentives for loyalty and support election results does create a to the leadership of their political parties, until such time as their electoral significance and policies start to reduce opportunities for party activists and more conducive environment to elective representatives. In both these regards, Mr Ramaphosa’s star is in the work towards a new consensus ascendant, while Mr Zuma is a spent force. within the ANC… bodes well for The mixed ANC leadership election results does create a more conducive environment to work towards a new consensus within the ANC – a process likely to more rational policy to achieve be helped along by Ramphosa’s policy knowledge and legendary skill as a more inclusive economic growth negotiator. This does bode well for more rational policy to achieve more inclusive economic growth faster, transform the economy quicker, effect more sincere faster… efforts to reduce corruption and eradicate state capture by parties external to the state. FTI Consulting, Inc • 1 South Africa Political Snapshot - New ANC President Ramaphosa’s mixed hand holds promise for South Africa’s future Consolidating leadership, fiscal discipline and avoiding a Zuma clash the ANC’s subsequent resolution to support it does complicate South Africa’s fiscal discipline and concerted steps to avert further matters, the fact that it did not specify an income threshold does downgrading of the country’s credit ratings are significant immediate allow for some leeway. priorities that Mr Ramaphosa will have to address as he seeks to Zuma and beyond until 2019: A Prague Spring? consolidate his power in the ANC. The extent to which these priorities The next election is only due mid-2019, but acquiescence on fiscal find expression in the President’s State of the Nation Address in discipline and a willingness to do climb-downs on fee-free education Parliament early in February, and in the Finance Minister’s budget and nuclear procurement will in all likelihood only secure President speech later the same month, will be a crucial early measure of the Zuma’s continuation in the Union Buildings (Presidential Office) until currency of Mr Ramphosa’s leadership. March of 2018. Two recent court judgements blocked further It has been widely anticipated that such a process would involve recourse to delay or quash prosecution of Mr Zuma for 783 charges championing President Zuma’s removal from the outset. However, of corruption and racketeering and investigation into his role in such an approach would always have been divisive, even if Mr facilitating the capture of state entities by external parties. It is likely Ramaphosa had achieved a more convincing victory. Instead, he is that both processes will be in motion by the second quarter of 2018. likely to engage in a three-step process: Formerly the ANC, to protect its own unity, defended President Zuma First, assert internally the necessity for fiscal discipline and as his dirty laundry was aired or consequences for his alleged crimes sound economic management to enable the achievement of the and missteps were sought through legislative or legal means. With goals set by the mandate provided to the new leadership at the the installation of the new leadership, that will no longer be National Conference where they were elected. necessary. Instead, President Zuma is likely to be seen from within Second, set out the requirements government would have to the ANC increasingly as a political liability, even by his former meet in order to achieve the required fiscal discipline and other support-base within the party. steps to avert further credit downgrades. As a result, there will be few options for the party but to recall the Third, canvass the extended leadership of the ANC (his fellow top President in a process similar to the recalling of President Mbeki in six leaders and the NEC) for their buy-in to direct government to 2008. It is likely he will be requested to resign by mid-2018, or have meet these requirements. to face motions in Parliament to remove him, which he will not This buy-in would be indispensable, as it would require President survive. Zuma to commit his government to moderate spending rapidly in Unlike with President Mbeki’s recalling, the probability is high that Mr order to plug a medium-term budgetary shortfall of R50bn, to Ramphosa himself will succeed Zuma as President of an interim announce new measures to strengthen the management and government to see the country through until the 2019 election. For sustainability of cash-guzzling state-owned enterprises and desist the sake of party unity, anything resembling a purge of Zuma- from any further efforts to keep his nuclear procurement plans on loyalists will be avoided, but it is likely that Cabinet ministers most the table. A complex manoeuvre will also be required to delay, publically associated with state capture allegations, and most likely mitigate or withdraw the introduction of fee free education for to be stumbling blocks to improved perceptions of the government in students at tertiary institutions – something made more difficult by the run-up to the 2019 elections, may be replaced. At a minimum, the ANC’s adoption of this priority as a Conference resolution. these may include Ministers David Mahlobo (energy) and Mosebenzi None of these are simple, but they are not impossible. Many of Zwane (mining). President Zuma’s expanded patronage network are maintained The precedent set by President Mbeki’s recalling suggests that in through government and state-owned enterprises procurement this interim period, it is likely that there will be a heightened contracts, but much of this network is in a partial state of undoing, openness by the ANC and government to align internally and with while his proxies are largely incapable of defending his positions in external stakeholders on the objectives set by the party at the ANC’s that regard. 54TH National Conference. This will include an openness to contest The public response to President Zuma’s fee-free education on the best policy routes to achieve these objectives in a manner announcement was underwhelming, in part because of the that will become much more institutionalised after the 2019 transparency of the President’s motives. It was also preceded by a election, should the ANC emerge victorious. sense of resignation about the unfeasibility thereof as a result of a This should represent a valuable opportunity for the private sector comprehensive investigation earlier in the year, which indicated the and other stakeholders to build consensus views with the interim- unfeasibility of fee-free tertiary education in South Africa. In addition, Ramaphosa on the way forward for South Africa on economic and the popular student movement that agitated for it had all but other matters that could serve the country well into the third decade disintegrated and is unlikely to be revived in the near future. While of the century. Failure to position and make use of this opportunity South Africa Political Snapshot - New ANC President Ramaphosa’s mixed hand holds promise for South Africa’s future fully may exact huge opportunity cost for the economy of the country, more tenuous position. His secured the Secretary-General position until such time as a post-Ramphosa scenario is secure. with a wafer thin majority of only 24 votes, which is now subject to a Ramaphosa, the top six and the Dambuza factor potential challenge as result of 68 votes which where, for reasons yet to be determined, not included in the final tally. Negotiations It is acknowledged that Ramphosa has not been dealt an unlimited where still ongoing at the time of writing as to whether there will be hand and that his immediate priorities will be to unite the ANC further challenges in this regard, but in addition to these woes, Mr behind a broadly accepted policy agenda that can take the country Magashule’s ability to marshal and build the full party machinery of forward.
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